Newsletter

Future funds, cuts

Alaska U.S. Sen. Mark Begich says he’s cautiously optimistic that the congressional super committee of 12 will be able to craft a plan for budget reductions by a Nov. 23 federal deadline.

There’s more than a 50 percent chance the super committee, with its bicameral makeup of six senators and six representatives split evenly on party lines, could achieve a majority decision to support a plan, the senator told the Downtown Anchorage Rotary Club Aug. 30.

The committee is working with a lot of budget ideas that have been circulating, including one Begich had a hand in as a member of the Senate’s Budget Committee, he said. The pressure of deadlines for the super committee to try to reach agreement — the first by Thanksgiving — is a reason for optimism, Begich said.

Congress hasn’t delegated its fiscal authority to the group of 12, the senator said. The congressional appropriation committees will give their recommendations to the committee by Oct. 14. Begich intends to forward a spending plan before that date for the agencies he’s responsible for as chairman of the oceans subcommittee, he said.

Those agencies include the National Oceans and Atmospheric Administration and the Coast Guard, which are important to Alaska.

The super committee takes its recommendations to the full Congress for an up-or-down vote by Dec. 23. Begich likes the pressure put on the process by the holiday deadlines, he told Rotary members.

“I have learned that holidays rule decision-making in Congress. The longer you give someone to make a decision the longer it will take,” so setting the deadlines just before the Thanksgiving and Christmas will force decisions to be made.

“I like the idea of an up or down vote,” Begich said, because it speeds the decision-making without the distraction of amendments being offered that are sometimes more linked to hometown politics than solving the nation’s problems.

Like his Alaska colleague in the Senate, Lisa Murkowski, Begich said he believes some kind of revenue measure, in the form of tax reform, will be needed as part of the final package. “We can’t get there just with spending cuts,” he said.

Begich’s own ideas involve closing tax loopholes that allow companies like General Motors to pay little corporate income tax while most businesses pay rates of 35 percent to 38 percent.

“This is a fairness issue,” the senator said.

The U.S. has the highest corporate tax rates in the world, he said, and that hurts the nation’s competitiveness.

Begich likes the idea put forth by the bipartisan Budget Committee of compressing the business tax rates and lowering the average tax rate businesses would pay to about 25 percent. This would be accompanied by “clearing out a chunk of loopholes,” in the tax code, Begich said.

The senator said he also supports allowing small businesses to depreciate investments in equipment in one year rather than the multi-year depreciation schedule in the current law.

For individual taxpayers, Begich supports simplifying the tax reporting procedure so that everything can be done on one page. The current system is too complicated and only 30 percent of taxpayers take advantage of the itemized deductions.

One area Begich would fight to defend is military pay, retirement and health benefits.

“These people are laying down their lives for us. It’s the least we can do,” he told Rotary members.

Military families are already under financial pressure from repeated deployments.

“There will soon be 9,000 troops from Alaska deployed in Afghanistan, and we’ll see the effects,” Begich said.

Thirty percent of the recipients of food bank assistance are military families, he said.

Begich said federal investments in energy, infrastructure and education are an important part of the solution.

“We have to dual-track job creation and deficit reduction or we risk cutting ourselves into a double-dip recession,” he said.

There’s a direct connection between education and economic competitiveness. The U.S. used to be among the top 10 of nations in new inventions patented, but “we’re now in the middle of the pack, and this is unacceptable,” Begich said.

On oil and gas issues Begich said he is now more optimistic than ever that there will soon be breakthroughs on regulatory problems impeding petroleum exploration in the Arctic offshore and onshore in the National Petroleum Reserve-Alaska.

“I believe that by this time next year we’ll see exploration under way in either the Beaufort Sea, the Chukchi Sea or the National Petroleum Reserve, or in more than one of these areas,” Begich said.

Arctic offshore exploration, in federally controlled waters, has been delayed by a series of changes in federal permitting procedures following the 2010 Gulf of Mexico well blowout and spill. Exploration in the NPR-A has been hampered by a lack or surface access due to the denial of a permit for a bridge across the Colville River by the U.S. Army Corps of Engineers.